First Quarter 2024 Net Income of $174.1 million or $0.64 per Diluted Share First Quarter 2024 Adjusted Net Operating Income (Non-GAAP) of $178.4 million or $0.65 per Diluted Share MILWAUKEE, May 1, 2024 /PRNewswire/ -- MGIC Investment Corporation (NYSE:MTG) today reported operating and financial results for the first quarter of 2024. Tim Mattke, CEO of MTG and Mortgage Guaranty Insurance Corporation ("MGIC") said, "We began the year with a solid quarter generating net income of $174 million, delivering a return on equity of 13.7%, and increasing book value per share by 14.5% year-over-year while returning meaningful capital to our shareholders. We continue to benefit from favorable credit trends and the resiliency of the housing market. We remain confident in our position in the market and ability to execute our business strategies." SUMMARY FINANCIAL METRICS Quarter ended  ($ in millions, except where otherwise noted) Q1 2024 Q4 2023 Q1 2023 New insurance written (NIW) (billions) $                           9.1 $                         10.9 $                           8.2 Net premiums earned $                       242.6 $                       226.4 $                       242.0 Annual persistency 85.7 % 86.1 % 84.5 % Insurance in force (billions) $                       290.9 $                       293.5 $                       292.4 Losses incurred, net $                           4.6 $                          (9.5) $                           6.4 Primary delinquency inventory 24,142 25,650 24,757 Primary IIF delinquency rate (count based) 2.15 % 2.25 % 2.12 % Loss ratio 1.9 % (4.2 %) 2.7 % Underwriting expense ratio 25.7 % 24.6 % 31.1 % Net premium yield (bps) 33.2 30.8 32.9 In force portfolio yield (bps) 38.5 38.6 38.7 Annualized return on equity 13.7 % 15.2 % 13.3 % Book value per common share outstanding $                       18.97 $                       18.61 $                       16.57 Adjust for AOCI $                         1.21 $                         1.16 $                         1.37 Tangible book value per share $                       20.18 $                       19.77 $                       17.94 CAPITAL AND LIQUIDITY As of ($ in billions, except where otherwise noted) March 31, 2024 December 31, 2023 March 31, 2023 PMIERs available assets $                           5.9 $                           5.8 $                           5.9 PMIERs excess $                           2.5 $                           2.4 $                            2.4 Holding company liquidity (millions) $                          793 $                          918 $                          582   FIRST QUARTER 2024 HIGHLIGHTS We paid a dividend of $0.115 per common share to shareholders during the first quarter of 2024. We repurchased 4.7 million shares of common stock using $93.3 million of holding company cash. In January, S&P upgraded MGIC's financial strength and credit rating to A- and at the same time upgraded the credit rating on MGIC Investment to BBB-. The outlook for the ratings is stable. In March, Moody's affirmed MGIC's A3 IFS rating, and changed the outlook to positive from stable. SECOND QUARTER 2024 HIGHLIGHTS In April, we repurchased an additional 2.7 million shares of our common stock using $54.8 million of holding company cash. We declared a dividend of $0.115 per common share to shareholders payable on May 21, 2024, to shareholders of record at the close of business on May 9, 2024. MGIC paid a $350 million dividend to our holding company. In April 2024, our board of directors approved an additional share repurchase program, authorizing us to purchase up to $750 million of common stock prior to December 31, 2026. Conference Call and Webcast Details MGIC Investment Corporation will hold a conference call May 2, 2024, at 10 a.m. ET to allow securities analysts and shareholders the opportunity to hear management discuss the company's quarterly results. Individuals interested in joining by telephone should register for the call at https://register.vevent.com/register/BI67cd18ae5035429a817e573920d45d36 to receive the dial-in number and unique PIN to access the call. It is recommended that you join the call at least 10 minutes before the conference call begins. The call is also being webcast and can be accessed at the company's website at http://mtg.mgic.com/ under "Newsroom." A replay of the webcast will be available on the company's website through June 3, 2024. About MGIC Mortgage Guaranty Insurance Corporation (MGIC) (www.mgic.com), the principal subsidiary of MGIC Investment Corporation, serves lenders throughout the United States, helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality through the use of private mortgage insurance. At March 31, 2024, MGIC had $290.9 billion of primary insurance in force covering 1.1 million mortgages. This press release, which includes certain additional statistical and other information, including non-GAAP financial information and a supplement that contains various portfolio statistics, are all available on the Company's website at https://mtg.mgic.com/ under "Newsroom." From time to time MGIC Investment Corporation releases important information via postings on its corporate website, and via postings on MGIC's website for information related to underwriting and pricing, and intends to continue to do so in the future. Such postings include corrections of previous disclosures and may be made without any other disclosure. Investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information for MGIC Investment Corporation alerts can be found at https://mtg.mgic.com/shareholder-services/email-alerts. For information about our underwriting and rates, see https://www.mgic.com/underwriting. Safe Harbor Statement Forward Looking Statements and Risk Factors: Our actual results could be affected by the risk factors below. These risk factors should be reviewed in connection with this press release and our periodic reports to the Securities and Exchange Commission ("SEC"). These risk factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make. Forward looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as "believe," "anticipate," "will" or "expect," or words of similar import, are forward looking statements. We are not undertaking any obligation to update any forward looking statements or other statements we may make even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. No investor should rely on the fact that such statements are current at any time other than the time at which this press release was delivered for dissemination to the public. While we communicate with security analysts from time to time, it is against our policy to disclose to them any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report, and such reports are not our responsibility. Use of Non-GAAP financial measures We believe that use of the Non-GAAP measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors. These measures are not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be viewed as alternatives to GAAP measures of performance. Adjusted pre-tax operating income (loss) is defined as GAAP income (loss) before tax, excluding the effects of net realized investment gains (losses), gain and losses on debt extinguishment and infrequent or unusual non-operating items where applicable. Adjusted net operating income (loss) is defined as GAAP net income (loss) excluding the after-tax effects of net realized investment gains (losses), gain and losses on debt extinguishment and infrequent or unusual non-operating items where applicable. The amounts of adjustments to components of pre-tax operating income (loss) are tax effected using a federal statutory tax rate of 21%. Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss) after making adjustments for interest expense on convertible debt, whenever the impact is dilutive, by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units and from convertible debt when dilutive under the "if-converted" method. Although adjusted pre-tax operating income (loss) and adjusted net operating income (loss) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items represent items that are: (1) not viewed as part of the operating performance of our primary activities; or (2) impacted by both discretionary and other economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, along with the reasons for their treatment, are described below. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these adjustments. Other companies may calculate these measures differently. Therefore, their measures may not be comparable to those used by us. (1) Net realized investment gains (losses). The recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles. (2) Gains and losses on debt extinguishment. Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, and/or improve our debt profile.  (3) Infrequent or unusual non-operating items. Items that are non-recurring in nature and are not part of our primary operating activities.   MGIC INVESTMENT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, (In thousands, except per share data) 2024 2023 Net premiums written $                               233,800 $                                230,192 Revenues Net premiums earned $                               242,644 $                                242,015 Net investment income 59,744 49,223 Net gains (losses) on investments and other financial instruments (8,509) (7,698) Other revenue 482 425 Total revenues 294,361 283,965 Losses and expenses Losses incurred, net 4,555 6,446 Underwriting and other expenses, net 61,027 72,541 Interest expense 8,899 9,374 Total losses and expenses 74,481 88,361 Income before tax 219,880 195,604 Provision for income taxes 45,783 41,057 Net income $                               174,097 $                                154,547 Net income per diluted share $                                     0.64 $                                      0.53   MGIC INVESTMENT CORPORATION AND SUBSIDIARIES EARNINGS PER SHARE (UNAUDITED) Three Months Ended March 31, (In thousands, except per share data) 2024 2023 Net income $                                           174,097 $                                           154,547 Interest expense, net of tax: 9% Convertible Junior Subordinated Debentures due 2063 — 375 Diluted net income available to common shareholders $                                           174,097 $                                           154,922 Weighted average shares - basic 270,314 290,989 Effect of dilutive securities: Unvested restricted stock units 2,794 2,079 9% Convertible Junior Subordinated Debentures due 2063 — 1,644 Weighted average shares - diluted 273,108 294,712 Net income per diluted share $                                                0.64 $                                                 0.53   NON-GAAP RECONCILIATIONS Reconciliation of Income before tax / Net income to Adjusted pre-tax operating income / Adjusted net operating income Three Months Ended March 31, 2024 2023 (In thousands, except per share amounts) Pre-tax Tax Effect Net (after-tax) Pre-tax Tax Effect Net (after-tax) Income before tax / Net income $ 219,880 $   45,783 $    174,097 $  195,604 $    41,057 $    154,547 Adjustments: Net realized investment losses 5,429 1,140 4,289 4,068 854 3,214 Adjusted pre-tax operating income / Adjusted net operating income $ 225,309 $   46,923 $    178,386 $  199,672 $    41,911 $    157,761 Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share Weighted average shares - diluted 273,108 294,712 Net income per diluted share $          0.64 $          0.53 Net realized investment losses 0.02 0.01 Adjusted net operating income per diluted share $          0.65 (1) $          0.54 (1) Does not foot due to rounding   MGIC INVESTMENT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, March 31, (In thousands, except per share data) 2024 2023 2023 ASSETS Investments (1) $      5,688,261 $       5,738,734 $       5,579,426 Cash and cash equivalents 431,347 363,666 358,214 Restricted cash and cash equivalents 8,221 6,978 8,358 Reinsurance recoverable on loss reserves (2) 39,200 33,302 32,761 Home office and equipment, net 37,614 38,755 40,580 Deferred insurance policy acquisition costs 13,846 14,591 18,097 Deferred income taxes, net 76,271 79,782 100,174 Other assets 240,486 262,572 214,678 Total assets $      6,535,246 $       6,538,380 $       6,352,288 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Loss reserves (2) $         504,447 $          505,379 $          558,515 Unearned premiums 148,935 157,779 183,467 Senior notes 643,563 643,196 642,092 Convertible junior debentures — — 21,086 Other liabilities 135,958 160,009 169,484 Total liabilities 1,432,903 1,466,363 1,574,644 Shareholders' equity 5,102,343 5,072,017 4,777,644 Total liabilities and shareholders' equity $      6,535,246 $       6,538,380 $       6,352,288 Book value per share (3) $             18.97 $              18.61 $              16.57 (1) Investments include net unrealized gains (losses) on securities $        (351,064) $        (337,909) $        (414,984) (2) Loss reserves, net of reinsurance recoverable on loss reserves $         465,247 $          472,077 $          525,754 (3) Shares outstanding 268,990 272,494 288,366   MGIC INVESTMENT CORPORATION AND SUBSIDIARIES ADDITIONAL INFORMATION - NEW INSURANCE WRITTEN 2024 2023 Q1 Q4 Q3 Q2 Q1 New primary insurance written (NIW) (billions) $              9.1 $            10.9 $            14.6 $            12.4 $              8.2 Monthly (including split premium plans) and annual premium plans 8.8 10.3 14.0 12.0 7.9 Single premium plans 0.3 0.6 0.6 0.4 0.3 Product mix as a % of primary NIW FICO < 680 3 % 4 % 4 % 4 % 5 % >95% LTVs 15 % 13 % 12 % 11 % 13 % >45% DTI 28 % 30 % 28 % 22 % 23 % Singles 3 % 5 % 4 % 3 % 4 % Refinances 2 % 3 % 1 % 2 % 2 % New primary risk written (billions) $              2.4 $              2.8 $              3.8 $              3.2 $              2.1   MGIC INVESTMENT CORPORATION AND SUBSIDIARIES ADDITIONAL INFORMATION - INSURANCE IN FORCE and RISK IN FORCE 2024 2023 Q1 Q4 Q3 Q2 Q1 Primary Insurance In Force (IIF) (billions) $            290.9 $             293.5 $             294.3 $             292.5 $          292.4 Total # of loans 1,123,209 1,139,796 1,151,431 1,155,439 1,164,196 Premium Yield In force portfolio yield (1) 38.5 38.6 38.6 38.6 38.7 Premium refunds (2) 0.1 (0.5) 0.2 (0.1) (0.1) Accelerated earnings on single premium 0.3 0.5 0.4 0.4 0.3 Total direct premium yield 38.9 38.6 39.2 38.9